I am confused by the comment in the last sentence ...
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Retirement tax questions

I am confused by the comment in the last sentence about it being "not an uncommon mistake" to roll a large 401(k) balance into a traditional IRA with a significant basis.  While doing so would indeed dilute the percentage of the non-deductible contributions Basis within the aggregate of the now larger traditional IRAs resulting in more taxes having to be paid from the IRAs, wouldn't it identically reduce the balance within the 401(k) and resulting RMD withdrawal subject to taxes at the same time?    

Since the tax rate and distribution period is the same on both 401(k) withdrawals and on the taxable (i.e. non-Basis) component of IRA withdrawals, the net taxes would be identical whether or not the 401(k) balance had been transferred.

The only difference I see is that with 401(k)s you can defer taking the Required Minimum Distribution (RMD) withdrawals (and paying the associated taxes) beyond age 70 1/2 if you are not retired, whereas with IRAs the distributions must start at age 70 1/2 regardless of retirement.  So if you have an IRA with a significant basis are not planning to retired until after age 70 1/2, it might make sense to not roll-over 401(k) funds into the IRA so you can minimize the taxes on the IRA RMD withdrawals while you are still working.

If I'm not understanding any of the above correctly, please explain. Thank you in advance.
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